Operating expenses must be deducted

I note a letter in issue 77 from Mr Hudson of the Umina-Ettalong ALP defending the new poker machine tax instituted by the State Labor Government.

He cites the club having an income from poker machines for 2002 of almost $3 billion while omitting to mention that this is gross income from which the bills (operating expenses) have to be paid.

One Central Coast club of which I am a member had a poker machine income for this period of just under $14 million.

Its operating expenses for the same period was just over $16 million which would have resulted in an operating loss had it not been for additional income from other sources.

Mr Hudson does not mention the killer here which is the 10 percent GST, agreed to be reimbursed to the clubs by the Federal Government but now denied by the State Labor Government.

This 10 percent GST is mostly off the top line and will be enough to send many of the registered clubs to the wall even before the actual poker machine tax is applied.

The club, to which I refer, will be severely affected by the further GST of 10 percent as it had an overall profit of just under seven percent of the total trading income of the club of just over $1.3 million.

I am a member of a number of clubs on the Central Coast and dine out frequently and already the costs of eating out at the clubs has risen dramatically.

I estimate the costs of eating out for myself and my family have risen by at least 25 percent through the effect of the new tax of Mr Carr and Mr Egan.

Bill Eneberg, Umina